Chief Executive Steve Jobs reportedly does not expect the forthcoming Apple TV refresh to be an instant overnight sensation like the iPad, because most consumers aren't ready to cancel their cable TV or stream content from iTunes.

Following up on his earlier report on Apple's alleged forthcoming Apple TV refresh on Sept. 7, Peter Burrows of Bloomberg revealed that the $99 device and 99 cent TV show rentals are not the "big video news" that the company hopes to get across. Instead, the focus will be that users can watch their favorite TV shows and movies on an iPad, iPhone and iPod touch. The new Apple TV, the report said, will be the "tail end" of Apple's video strategy.

"Even with the refresh, Jobs isn't convinced the new version will be a mainstream hit, says the person familiar with Apple's plans," Burrows wrote. "Most consumers aren't ready to cut the cord on their cable company, or put up with the tech-nastics required to stream content from the iTunes collection on their PC to their living room big-screen TV.

"In other words, it's a product that at best will delight some of the 'hobbyists' that have always been interested in the product."

He added: "My sense is that Apple doesn't want to overplay its hand, by making too much of this mobile TV opportunity. This isn't another 'revolution' in the making. Even if Apple wanted to try that, studios have all but nullified the possibility by refusing to let Apple sell subscriptions to your favorite shows, to be watched whenever and as many times as you like."

The report, and Jobs' alleged approach, is consistent with what the Apple co-founder said in June. In an interview at the All things D Conference, Jobs said Apple TV remains a hobby because it's hard to break in to a market where consumers are used to receiving a cable box for free or for $10 per month.

"The only way that's ever going to change," Jobs said, "is if you can really go back to square one, tear up the set top box, redesign it from scratch with a consistent UI across all these different functions, and get it to consumers in a way that they're willing to pay for it. And right now there's no way to do that."

But with a rumored $99 price and access to the App Store, the new Apple TV could also be a great value for consumers who want to do things other than rent TV shows and movies. Numerous reports have stated the device will run the iOS operating system, and one rumor has suggested it could access games and applications currently available in the App Store for the iPhone and iPad. Such an inclusion could represent Apple's entrance into the set top box gaming market.

"The only way that's ever going to change," Jobs said, "is if you can really go back to square one, tear up the set top box, redesign it from scratch with a consistent UI across all these different functions, and get it to consumers in a way that they're willing to pay for it. And right now there's no way to do that."

It is clear that Jobs "gets it" even if he doesn't have the leverage to fix it.

So, no revolution. Too bad. Maybe incremental change will still allow for improvement...

SJ has it right. Gotta break down the subsidized set-top box model. Get the studios on board with subscription plans. And do something about local sports. Then, it's bye-bye cable. Unfortunately for people (like me) in cities like Philadelphia, Comcast owns the Phillies, Sixers, and Flyers, and the TV networks which air most of their games. That's a tough nut to crack.

Dear Mr jobs,
Make a $99 tiny set top box with wifi, Bluetooth, 16gb NAND, iOS + apps, USB for HDDs and iDevices and 720p or higher with $0.99 movie rentals..
and I can guarantee this will be an overnight success

Dear Mr jobs,
Make a $99 tiny set top box with wifi, Bluetooth, 16gb NAND, iOS + apps, USB for HDDs and iDevices and 720p or higher with $0.99 movie rentals..
and I can guarantee this will be an overnight success

EDIT: support for MacBook air SuperDrive over USB would be nice too.

Its easy to have a successful product when you sell it at a loss.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

"Most consumers aren't ready to cut the cord on their cable company, or put up with the tech-nastics required to stream content from the iTunes collection on their PC to their living room big-screen TV.

I don't care where the shows come from but if they are going to come from the internet, where is the the bandwidth coming from? Oh right, from the cable company. Sort of a Catch 22 there, no?

SJ has it right. Gotta break down the subsidized set-top box model. Get the studios on board with subscription plans. And do something about local sports. Then, it's bye-bye cable. Unfortunately for people (like me) in cities like Philadelphia, Comcast owns the Phillies, Sixers, and Flyers, and the TV networks which air most of their games. That's a tough nut to crack.

Agreed. In this case, it isn't a technological problem, or evan a business problem - it's a legal issue. Remember all those copyright notices you see during games? "This broadcast is the property of the National Football League"? It is that way because of a contract, and likely a pretty lengthy one to boot. If the owner of the "game" has given an exclusive contract for broadcast, iTV is sort of out of luck. But how many have? And how many will wish to go with another distribution method once this (and other similar systems) hit the consumer? And we do have some coming "games" to be played in London shortly. How interested will the IOC be in this? IIRC, the world cup soccer thing was real popular on non-traditional distribution (non-network TV).

If the rumors are correct, the new iTV is the proverbial elephant's nose under the tent flap.

Actualy, apple is in a good position with $40bn to sell the box at a loss and still make money off $0.99 TV/movies

I don’t think having money in the bank is a good excuse to start losing money on a product.

Now, I can see Apple wanting to get a foothold in the living room by selling a cheap TV at lower net profit margin than their other products because they can’t command their typical margins in this “hobby” area. If they also plan to sell this as an entry TV and/or for your additional TVs (as I’ve mentioned previously) then it would make sense, but it would still behoove them to make a profit on the HW as renting TV shows is not a guarantee, unlike other loss leader HW that comes with a contract.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

SJ has it right. Gotta break down the subsidized set-top box model. Get the studios on board with subscription plans. And do something about local sports. Then, it's bye-bye cable. Unfortunately for people (like me) in cities like Philadelphia, Comcast owns the Phillies, Sixers, and Flyers, and the TV networks which air most of their games. That's a tough nut to crack.

Same here in NY with Cablevision owning the Knicks and Rangers and MSG. Cable companies are buying up all the content. The subscription service would have been huge.

There may be a chance with dedicated apps. As it is now many cable subscribers are hooked into their triple play packages.

I don't think its even that. This really isn't about hardware specs its about Apple being able to have agreements for current content. Which is going to be next to impossible for them with the cable and dish companies.

If all Apple can offer is streaming movies that you can already get ondemand or with epixhd they really have nothing major to offer and Jobs knows it. Most people don't want to watch season 1 of a series after its over, they want to watch it as its happening.

I agree. I stated in a thread yesterday on this site (I think) some of pitfalls networks may have to overcome when negotiating with Apple. I don’t think the pricing with Apple is the real issue, it’s the long term profits if they burn bridges with other distributors and ad companies. This is a very complex issue for all parties as the inevitable paradigm shift could destroy some key players.

They currently offer TV shows the next day, ad free. It would be great if they could offer that for rental with ads, but with the local ads being a part of most networks I doubt it.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

This article and your post goes along with what Ive been saying, Apple cant just let the living room go. They need to least have a place holder.

I totally agree that they need to be in there in some form, but I'd like to see them trying something a little more bold than a place holder. They do after all have the money to be able to deal with a flop, should they take a big gamble and have it go wrong.

I'm wondering why they don't look to partner with one of the content providers and effectively make the set-top box for them. Dish Network would seem to be a useful company to work with, since they have relatively low market share, I would have thought that given the right deal, partnering with Apple to provide the system would draw users to their service. I would certainly consider switching away from Comcast to a service that has a well done Apple interface.

In some respects it would be like the exclusive AT&T deal with the iPhone. I know a lot of people hate AT&T, but going with just one company has allowed AT&T to gain subscribers so is a benefit to them, and allowed Apple to start changing the way the network operators functioned, which has become a benefit to Apple.

I think the biggest drawback to the streaming set top model is the delay between the live broadcast and the availability online. Right now, the world is switching from watching "what's on" to "what's available." Typicially the availability of a program is 12-24 hours after its air date. Imagine if you could rent a TV show at the same time it airs for broadcast.

The more iOS devices there are "out there" the more money apple and developers can make off of apps, content, and iAds

That's true, to a point. It's like the game console business model, in that XBox and PS3 are sold at a loss. The difference is Sony and Microsoft make a lot of money from each game sold, regardless of the manufacturer of the game.

If what Apple says is true, and actually the cut of the App store sale they take only covers their operating costs, then it's not a model that's going to work out for them.

No it won't because its not about the price of the hardware its about gaining control of the content which he can't do. Its all about gaining control or having agreements with shows that are running NOW. Now with services like epixhd where you can get ondemand and also stream from your computer at any time for 10.00 a month this just isn't going to happen for Apple on any large scale.

I think Apple would love to have apps like Epix and Netflix on the iTV. Apple never really made a significant amount of money on the iTunes store.

The problem is wrestling control of TV shows away from cable. Networks are making more money and have higher ratings than ever. There is currently no real incentive to offer their content on the web. I even wonder if there will be a Hulu plus app for this device.

It would take a similar situation to music where the content was being torrented to the point that they were actually losing viewership.

The networks don't want to let Apple walk in and take control of the television and video business like they did with music, so it won't be iTunes that makes iTV, it will be the apps.

If hulu and netflix are available, a ton of content will be available immediately, at a very low cost. Add in apps for specific channels or categories (sports/news), as well as html5 streaming through Safari, and possibly external TV tuners (they are supported by iOS if an associated app is provided) and you have unlimited potential. It just depends what apps are made available to it.

Most people don't want to watch season 1 of a series after its over, they want to watch it as its happening.

That is the problem with offering TV shows through netflix - Its nice if you are watching a TV series from last season and you are catching up, but it is kinda silly to expect people to wait 6 months (or whatever the turnaround) to watch the episode of Lost (yes I know it is over but that's all I can think of) that everyone is talking about in the office. Hulu makes you wait an extra day, but that is much better than waiting for the season to end. Of course the two problems that entails is that you have to get Hulu pro (10 bucks a month) and the sparse content that Hulu offers.

Chief Executive Steve Jobs reportedly does not expect the forthcoming Apple TV refresh to be an instant overnight sensation like the iPad, because most consumers aren't ready to cancel their cable TV or stream content from iTunes..

Well duh, offer a $99 tuner box that plugs into it. Have an app in the store that you download to operate it, and pass the video through.

The networks don't want to let Apple walk in and take control of the television and video business like they did with music, so it won't be iTunes that makes iTV, it will be the apps.

If hulu and netflix are available, a ton of content will be available immediately, at a very low cost. Add in apps for specific channels or categories (sports/news), as well as html5 streaming through Safari, and possibly external TV tuners (they are supported by iOS if an associated app is provided) and you have unlimited potential. It just depends what apps are made available to it.

I totally agree with you about the networks not wanting to end up with Apple controlling TV/movies like they do music, but whilst they consistently fail to provide a decent alternative themselves, they make the same mistake the music industry did, and encourage piracy.

I'm not condoning piracy in any way, and I'm totally against it, but I can see the parallels forming.

The first one flopped and it became a "hobby" item for Apple. Now that the refresh is coming out, Apple continues to say this is a "hobby" item. That way they explain the lackluster sales. They call it a hobby because that allows them to say that they didn't put their full weight behind it and that is why it failed.

It failed because they put their full weight behind it and few people were interested.

Assuming any of this crap is true, why would Steve Jobs replace a hobby device with yet another device he deems won't be a big hit? How in the world does that add up to anything other than a bored Bloomberg writer short-selling his Apple stock owned by distant family member?

This guy needs to change the bearings on his Magic 8-Ball, and return to his ongoing Magic the Gathering game with his roommates.

Even at 99 cents, renting individual episodes isn't going to fly. People fundamentally do not want to pay individually to watch TV episodes. This is the exact opposite situation as we have with music, where subscription models don't work because people want to own their music and they want to have as many songs as they like, and only the ones they want (Hence why picking and choosing tracks from an album is such a big deal and one which Apple defends).

People don't care about owning TV Shows and movies, because unlike music they're more likely to be happy seeing a show or movie once or twice, rather than lots of times. That makes people less willing to bill it to their credit card every time they want to watch something. With TV, the opposite argument as we have with music comes into effect. Most people would rather pay a flat fee to watch whatever they like, because they're liable only to watch it once anyway. A per-unit cost, to most people, makes more sense in a buy-to-own environment like music.

You'd think the broadcasting Industry, the inventors of "Free-to-Consume" and the modernisers of the "all you can eat" flat fee model would get this, but they don't. Like the music industry, for some reason, the broadcasters want to copy the other industry's model - but only in digital download. It makes no sense.

The first one flopped and it became a "hobby" item for Apple. Now that the refresh is coming out, Apple continues to say this is a "hobby" item. That way they explain the lackluster sales. They call it a hobby because that allows them to say that they didn't put their full weight behind it and that is why it failed.

It failed because they put their full weight behind it and few people were interested.

The Apple TV failed because it was too locked down. With iOS I think it'll be a huge hit with the apps. But that doesn't mean it will "change" TV.

I really wanted the new Apple TV to be a great project, and I hope it still will be, but as long as it does not support full 1080p HD I don't think it can. Regardless if people can tell the difference between 1080p and 720p they want to be able to say that their product can broadcast in full HD because it is the best resolution. Most people can't tell the difference but they still want to be able to say they have the best and as long as Apple TV doesn't broadcast in 1080p it wont be the best and that is a huge fault on Apple's part.

The first one flopped and it became a "hobby" item for Apple. Now that the refresh is coming out, Apple continues to say this is a "hobby" item. That way they explain the lackluster sales. They call it a hobby because that allows them to say that they didn't put their full weight behind it and that is why it failed.

It failed because they put their full weight behind it and few people were interested.

Nah...buying Quattro/iAd is like a shot across the bow to Google. Apple didn't even bother to do that vs the content providers. The equivalent would be to fund indie productions of movies and TV shows for sale on iTunes. Full weight behind aTV is buying a studio and going all out on vertical integration.

Wanna bet that Jobs couldn't run a studio with high standards of quality? *cough*Pixar*cough*

Interesting that Pixar was sold to Disney in 2006 vs Apple isn't it? Full weight of Apple/Jobs for aTV (launched in 2006) would have gone with Pixar Original Content exclusively on iTunes...

I don't care where the shows come from but if they are going to come from the internet, where is the the bandwidth coming from? Oh right, from the cable company. Sort of a Catch 22 there, no?

Not neccessarily. From FiOS for example.

BTW internet is really on-demand with almost unlimited media resources. That can't be done by cable companies so far.

Okay just take YouTube approach like few of us and watch movies from there (yes some of foreign origin are published that even if it is grey market). If this sort of service was provided for some small fee without some restrictions (e.g. because it is offered on cable network now or because they cannot store 1,000,000 movies) then it would be interesting offer.

Also like someone pointed here: I do not care where content comes from - I want to watch it. So be it YouTube, some network or some store.

Cable companies need to start understanding that what they actually sell to people is content rather than network hardware and lines.... at least that is their profit source I would guess. Then the content can be on Internet just like with with internet TV streamed.

To bad they try to sell public celebrity... inside vehicle together with this vehicle.

And I do not care about some channels by bulk. I would watch up 30 of them select by me and my wife. Do I care about 300 channels? No. Can this be done by cable companies? I do not think so.

Well, if SJ would add DVR capabilities to the AppleTV/iTV as some of us have been waiting years and years for, perhaps he'd sell a lot more of them. As it is, I'm recording my shows on a Windows 7 Media Center that needs rebooting every few days because it's so unstable. I'd punt it out the door in a heartbeat if Apple offered an off-the-shelf DVR solution. But Steve is being stubborn Steve and still won't provide what the customers want.

I imagine this thing as more of a wall-sized iPad than a TV. When the iPad was introduced, Steve sat forward in his easy chair enjoying iPad content. With this new device, you sit back. Have a magic trackpad by your side (or slick iPhone remote app) and let the whole family enjoy all the apps in the app store, including Hulu Plus, Netflix, the iTunes content... Open the Sports Illustrated app (remember their concept video?) and enjoy the interactive content in there. Play games like its a video game console. Surf the net, and so on.

I think this thing will be leveraging the app store as much or more than the iTunes store.

I totally agree that they need to be in there in some form, but I'd like to see them trying something a little more bold than a place holder...

I'm wondering why they don't look to partner with one of the content providers and effectively make the set-top box for them. Dish Network would seem to be a useful company to work with...

I really like the sound of this one. I'm sure I echo the feelings of everyone here when I say that the user interface on my setop box is one of the most obtuse and unintuitive interfaces I've ever seen. I keep wishing someone like Apple could do SOMETHING. (It's even worse than that monstrosity Microsoft Sync in my car. Don't get me started...)

If the thing doesn't have hardware 1080p support, there's no wonder Steve doesn't believe it will be a success: It can't be.

The only thing stopping me from getting the current Apple TV is lack of 1080p support.

Quote:

Originally Posted by Someone who will eventually post in response to the above, attempting to call me out

But you can get a Broadcom decoder chip and have that support now!

Sure, at the expense of its Wi-Fi, rendering it absolutely useless for my needs.

I don't watch television and haven't for years. I have simply digitized all of my older movies and video content and watch them on my computer in iTunes. I've been moving to 1080p versions for some time now, and I'd like an Apple solution to give me a reason to buy a television.

If Apple doesn't want to cater to my wish of 1080p playback of my existing content, then I just won't buy the new Apple TV or a television. I'm not too broken up about it, but I'd love for them to at least try.